Hoboken mentioned on Bloomberg: Real or Propaganda?

Toll Bros. says they’re doing great – how about everyone else?

The headline of the article made it seem as if Hoboken properties are flying off the shelves like hot cakes: “Hoboken Homes Gone in 60 Minutes Signal U.S. Recovery” – and the sizzling opening paragraph read:

“For the latest sign of a U.S. housing rebound, Toll Brothers CEO Douglas Yearley points to Hoboken, New Jersey: A couple torn between two condos last month at the sales office for its Hudson Tea complex decided to think about it over lunch. When they returned an hour later, both units were gone.”

To me, the article read like a sales brochure for Toll, and based on the rest of the housing market in this country – it begs the question “Is this factual news, or just psychological propaganda wrapped into an article?”

Perhaps Hoboken is insulated from the woes everywhere else – but is the market really rebounding? Are they doing this to promote the new 1450 Washington building, as well as the upcoming Maxwell Place project they’re heavily invested in?

4 Responses to ** Is Hoboken Housing Market Immune? **

1.

rover June 11th, 2012 |

Sure they may be selling now with low mortgage rates and good credit. But debt is debt, and when the price of practically everything else drastically goes up, those mortgage payments will be skipped and skipped. I don’t see how Hoboken is immune from a wave of defaults and foreclosures in the future. Unless I’m missing something

This is what I bet really happened: salespeople knew quite well both units were going to go under contract that day so they showed them to these people (who probably thought they had some time and negotiating leverage) – and then tried to trick them into buying a third place Toll had more trouble getting rid of. Who knows if someone in this situation even pays higher at that point. Probably.

In regard to 1450 Washington, units did seem to sell very fast for what it is. The interest in this building is a surprise to me. I don’t like cookie-cutter places, but with that said I would be 10x more interested in living in an older unit in Maxwell Place. 1450 Washington is staged well though.

The Hoboken market was never immune, as prices did decline about 20-25% from the height of the bubble in the mid 2000s. However, it has indeed bounced back nicely. Consider these facts: Average prices for a 2 bedroom condo breached the $500 per sq. ft. barrier in May – something not seen since March 2009. Prices are up 10% for average sales price and 13% for price per square foot since last year. There’s only a little over 3 months of existing inventory, which is next to nothing. Lastly, average days on market for a new listing is only 47 days.

Those waiting for the so-called “shadow inventory” of foreclosures to flood the market – keep waiting. It’s not gonna happen in this high-demand market. This isn’t Las Vegas or Detroit, and it ain’t the burbs either – there were never mass amounts of distressed properties here to begin with because: a) the job market in the metro area stayed strong relative to the other areas of the country; and b) it’s always easy here in a strong rental market to rent out a unit you can no longer afford and have your mortgage covered. There have been very, very few foreclosures in Hoboken, while short-sales have been slightly more common. But in either case, there has not been enough of either to affect the entire market.